In Episode 162 of “The Trusted Advisor,” RSPA CEO Jim Roddy sits down with John Giles, President and Owner of software provider Round 2 POS, to talk retail IT tech trends – with a focus on AI’s impact on VARs and ISVs.
“The Trusted Advisor,” powered by the Retail Solutions Providers Association (RSPA), is an award-winning content series designed specifically for retail IT VARs and software providers. Our goal is to educate you on the topics of leadership, management, hiring, sales, and other small business best practices. For more insights, visit the RSPA blog at www.GoRSPA.org.
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Full episode transcript via Apple Podcasts:
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Roddy: Welcome to another episode of the Trusted Advisor podcast and video series, powered by the Retail Solutions Providers Association.
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Roddy: Our goal on the pod is to accelerate the success of today’s and tomorrow’s leaders in the retail IT industry.
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Roddy: I’m Jim Roddy back with you again.
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Roddy: Thank you so much for joining us.
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Roddy: In this episode, we’ll talk retail IT tech trends with John Giles, president and owner of Round 2 POS, a point of sale software provider.
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Roddy: John’s been active in the RSPA for many years, including being on stage at RetailNOW and the RSPA Inspire Leadership Conference.
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Roddy: Prior to launching Round 2, John was a creator of Point of Sale Software Future POS, building his ISV into a top five restaurant software before selling the company in 2017.
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Roddy: Hey John, welcome back to The Trusted Advisor.
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Giles: Great to be here as always, Jim.
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Roddy: Yeah, always great to talk to you.
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Roddy: So when we say Retail IT Tech Trends, like maybe prior years we could have gone down a whole bunch of different avenues, but the most prominent tech trend in our space and maybe every industry at this point is AI.
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Roddy: So what is your overarching take on how you see AI impacting the Retail IT channel today and then into the future?
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Giles: What’s funny, a couple of years ago, I can remember people were just trying to find a way to use AI in the same sentence with their company, but I would say in the last year to two, you have seen real adoption and real benefit from it.
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Giles: One of the things I would say as an ISV that they probably, probably all of the ISVs have figured out by now, is that it really increases developer productivity.
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Giles: You can get things coded much faster, maybe not as perfect as a human would do it, but it does it very quickly.
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Giles: The downside is it creates a bottleneck for QA.
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Giles: If you’re in marketing, I mean, it’s awesome for marketing, like brochures, press releases, things like that.
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Giles: I’ve actually used it for graphics, and ChatGPT specifically can turn out some beautiful, beautiful graphics.
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Giles: I think as time progresses, you’ll see just more processes becoming automated because it’s easy to create that automation.
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Giles: If I tell you much more, I’m going to be giving away my development roadmap, so I’m going to move on before I steal my own secret sauce here.
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Roddy: Sure.
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Roddy: Now, before we hit record on this, you and I had talked a little bit, and I wrote down some of the quotes that you had related to AI.
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Roddy: One of them was, it has some magic to it, but it’s not a magic bullet.
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Roddy: Can you expand upon why you say that and what goes into it?
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Giles: Well, I hear people saying things that it’s going to be all things to all people, and I think with some of them, they want to see it through the lens of their company and don’t realistically think what it could be big picture.
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Giles: I’ve definitely seen some people that think it’s going to just do all their work for them or make their decisions for them.
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Giles: A couple of things I heard people saying, I’m just going to rewrite my old product in 30 days as Claude says he can do it.
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Giles: I think a lot of these things, quick gratification overlooks the fact that it’s a great engineer, it’s not a great architect, and it needs a human to make those architectural decisions.
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Giles: And if you don’t, it’ll build bridges in a circle.
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Giles: It doesn’t care if it gets to point B, it loves to write code and it’ll write a mountain of code.
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Giles: So, I mean, I’ve just seen a lot of hype and I’ve seen a lot of people portraying it the way they want it to play out, but I guess we’ll see.
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Giles: Like I said, it’s the Wild West and it’s going to evolve as time goes on and it’s almost like a wave, you just have to figure out how to ride.
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Roddy: Yeah, it reminds me of a software application that we were adopting back when I worked in the magazine publishing industry.
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Roddy: And one of our employees said, now tell me all about this thing that does this, this and this, it’ll help me lose 15 pounds, right?
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Roddy: Like get everything that came along with it.
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Roddy: And I’m in the middle of reading the book called The New Renaissance by Zach Cass.
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Roddy: We had him on the podcast before.
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Roddy: And there’s some things he says in there and I think he kind of reflected on it.
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Roddy: You can’t turn everything over to AI.
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Roddy: And that’s what it sounded like you were talking about is, in the retail IT channel, you can’t turn the architecture, the strategy, the overall thought process to it.
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Roddy: But maybe some execution things you can.
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Roddy: I guess, do you agree with that aspect of it?
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Roddy: Is that kind of what you’re saying?
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Giles: Yeah, you have to put guardrails on it and find out where it excels and let it excel there but keep the guardrails on because it will go off the road if you let it.
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Roddy: Got it.
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Roddy: Great.
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Roddy: And then one other thing you mentioned when we had talked in advance, you said about that folks in the retail IT channel need to build a moat around what they do related to AI.
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Roddy: Can you expand upon that?
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Roddy: I’m curious about that concept.
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Giles: I mean, I’m not sure I was the moat guy actually.
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Giles: Well, I mean, I think you need to figure out how you can use it in your business to improve your business.
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Giles: But my big push is how do I help my customers with it?
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Giles: Yeah, it can turn out code faster and things like that and streamline some of my activities.
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Giles: But now, how does that trickle down to the end consumer because it’s not making their life better?
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Giles: Well, then I’m just like everybody else.
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Giles: I’m just turning more stuff out, but I’m not really improving their life any.
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Giles: So that’s the challenge we’ve taken on is, how do we use this to make our customers’ lives better?
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Roddy: Got it.
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Roddy: Great.
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Roddy: Thank you for that.
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Roddy: So let’s talk about the software aspect of it, then we’ll talk about the reseller aspect of it and the impact.
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Roddy: So again, as we talked about at the outset, you’ve been a software developer, engineer slash entrepreneur your entire adult life.
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Roddy: Beyond what you talked about from helping things get coded faster, how do you see AI impacting ISVs?
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Roddy: We were just on a community call earlier today, our membership advisory group and somebody said, I can see in the future a thousand point of sale ISVs just a few months away, right?
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Roddy: They’re just going to have people writing all sorts of different code there.
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Roddy: How do you see the impact of AI on the software providers in the Retail IT channel?
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Giles: Well, I think as a business owner, they always say that a good business owner can see around the corners and see what’s coming.
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Giles: I would say that it looks that way, but it really is more about learning from the past and finding correlations to things you’ve seen and how they played out in the past, and probably the only thing, it is so new, it is so different than everything that’s ever come along in my industry.
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Giles: I tell my guys this all the time.
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Giles: I’m like this, I can give you pseudo parallels, but there’s nothing like this.
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Giles: The closest one I can give you from my own experience would be Visual Basic.
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Giles: I made my money in Win32 with Future POS.
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Giles: It was a Win32 product.
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Giles: I was a early adopter of Windows, and when I got into Windows, the only language was C and C++, and that was not an amateur’s language.
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Giles: You had to know how it worked under the hood.
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Giles: You touch the metal a lot, and you had to be a developer’s developer to work in C.
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Giles: I took a lot of pride in that because I was a C programmer, and Visual Basic came along, and it was brought out as a prototyping tool.
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Giles: It was bloated, clunky, not very pretty, but it allowed an amateur to create software very quickly.
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Giles: And of course, me being very proud that I’m able to do C and C++, I don’t need this Visual Basic crutch.
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Giles: Yeah, I kind of scoffed at it, and I poo-pooed it.
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Giles: But the reality of it is, I have a saying that I love to use, dumb the job down so a lesser man can be successful at it.
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Giles: And I feel like that was what Visual Basic did.
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Giles: It dumbed the jobs down so a lesser man could be successful at it.
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Giles: And while me as a software purist was like, oh, that stuff sucks, it’s junk.
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Giles: John Q.
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Giles: Public in the street did not care.
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Giles: And if it worked, if it didn’t really needed it too, that was good enough.
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Giles: And there are companies that built an entire legacy on Visual Basic, which was again meant to be a prototyping tool for beginners.
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Giles: So the lesson I took away from that is, don’t be so quick to sell something short because you view it as lesser from a technology perspective.
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Giles: I see the similar stigma around VibeCode.
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Giles: And have you heard the phrase VibeCode?
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Roddy: Sure, VibeCoding, yeah.
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Giles: So yeah, you tell it what you want and it says, is this what you were thinking?
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Giles: And no, I really want it a little more like this.
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Giles: You don’t really need to be a great engineer to VibeCode.
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Giles: But the end product, it resembles that.
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Giles: It’s poorly coded, it’s not maintainable, the code is very unreadable.
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Giles: But there again, we’re in the Wild West, we’re in the opening days of AI.
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Giles: Is it like that in five years?
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Giles: In five years, can AI take that crappy old code, VibeCode and clean it up into, polish that, turn it into something amazing?
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Giles: Probably.
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Giles: So I think that you have to be cognizant of the fact that even if it’s not all things today, it will eventually be.
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Giles: And then what does your landscape look like?
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Giles: And I would say that the guy that said there will be a thousand ISVs, there could be, but there will be 900 crappy ones.
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Giles: And it could just be this sea of very mediocre software and process of natural selection.
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Giles: I mean, a lot of things are going to shake out.
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Giles: And it was funny because I ran across this team of developers.
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Giles: They brought this inventory package to me that they had VibeCoded.
00:10:10.980 –> 00:10:14.660
Giles: And it was interesting.
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Giles: When we were doing things, it was when we were more focused on the meat markets.
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Giles: They would take like yesterday’s hamburger and factor that into tomorrow’s meat sticks.
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Giles: And that was a very innovative thing that they did in inventory because most packages couldn’t handle that.
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Giles: And it seemed like, oh, boy, these boys got it going on.
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Giles: They’ve really got it figured out.
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Giles: Came in and made a horrible sales pitch and told them it was going to cost them like $30,000.
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Giles: But you’re going to make it back in the first year and stuff like that.
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Giles: It’s like, you guys are such amateurs at business.
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Giles: It ain’t the AI that’s going to be your Achilles heel here.
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Giles: It’s going to be your approach to business.
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Giles: And I think you’re going to see that shake out a lot of times.
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Giles: I can vibe code.
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Giles: Look what I made in five minutes.
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Giles: Okay, but do you have all the other pieces?
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Giles: One of Alan Heyman’s sayings that has stuck with me my whole life was, for a one or two man business to grow into, one or two man operation to grow into a big successful business, so many things have to go right that it’ll probably never happen.
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Giles: And I tried to prove them wrong a bunch and I didn’t.
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Giles: So it is what it is.
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Giles: I mean, creating a successful business is so much more than creating a decent product or something that looks like a decent product.
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Giles: You have to have a whole lot of other intangibles and pieces that you might not have, you know.
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Giles: That’s just, I guess, the process of natural selection.
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Giles: Like I said, some of these are going to work out.
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Giles: A lot of them aren’t.
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Roddy: Yeah.
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Roddy: And I’m glad you brought that up because I was jotting down a note in terms of there’s still some constants in the business world and in the retail IT channel.
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Roddy: They’re going to hold up no matter what the technology is.
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Roddy: And for a while, I’ve coached, you know, startup ISVs when they’re entering this market.
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Roddy: Didn’t have that chance with you.
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Roddy: You were way ahead of me on that one.
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Roddy: I’m sure you’ve coached as well.
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Roddy: But a lot of times, they will do what you said is that, I have this such unbelievable product.
00:12:08.960 –> 00:12:11.260
Roddy: And you’re like, well, tell me about your channel strategy.
00:12:11.260 –> 00:12:12.700
Roddy: Tell me about your marketing strategy.
00:12:12.700 –> 00:12:13.720
Roddy: Tell me about your support.
00:12:13.720 –> 00:12:15.320
Roddy: And they’re like, none of that matters.
00:12:15.320 –> 00:12:17.060
Roddy: The software is so awesome.
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Roddy: And that’s kind of what it sounds like you’re talking about is that’s just one slice of things that need to go right in order for things to work in the retail IT channel.
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Giles: Yeah, 100% agree.
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Roddy: Yeah.
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Roddy: And I guess another parallel that I jotted down is like you were talking about vibe coding that now anybody can be a programmer.
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Roddy: You know, I come from the magazine world and remember desktop publishing, you know, when that came out and they’re like, the good news is anyone can be a publisher.
00:12:41.080 –> 00:12:44.300
Roddy: And I’m like, and the bad news is anyone can be a publisher.
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Roddy: And people would just churn out stuff that was just like, but it sounds like what you’re saying is some of this vibe coding can produce something that’s good enough for a certain portion of the market.
00:12:54.340 –> 00:12:56.480
Roddy: Is that, can you expand upon that in terms of it?
00:12:56.480 –> 00:12:57.500
Roddy: It could be a good enough product.
00:12:57.500 –> 00:12:58.760
Giles: You still need to be an engineer.
00:12:59.300 –> 00:13:03.500
Giles: That’s the thing and I would make the distinction, pick your AI.
00:13:04.020 –> 00:13:05.560
Giles: They’re great engineers.
00:13:06.120 –> 00:13:11.960
Giles: They can read a mountain of code and decipher it and give you a very concise description of what they’re looking at.
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Giles: And I mean, in the early days, and it was funny because when you did that one, I think it was a spill the tea or whatever, anyhow somebody was on there and they were like, I can do these things with AI that are just mind blowing.
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Giles: It was like, I could relate to where he was at because it was that eureka moment when you discover that there is really a genie here that can grant your wishes, but you haven’t quite realized that there are limits to what his wishes are and some of them may not be what you were hoping for.
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Giles: So I mean, there’s gonna be a lot of need for the engineer to have that architect to tell him, no, no, no.
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Giles: Like I can tell you lots of times when I’m working, using AI to help prototype something or whatever.
00:13:58.700 –> 00:14:00.380
Giles: And he’s like, I’m just gonna go do this.
00:14:00.380 –> 00:14:01.640
Giles: I’m like, hell no, you’re not.
00:14:01.640 –> 00:14:05.540
Giles: And it’s like, he’s just going straight off the bridge.
00:14:05.540 –> 00:14:08.020
Giles: And I’m like, no, no, no, no, no, no, back here, back here.
00:14:08.400 –> 00:14:10.920
Giles: And you just, you have to be those guardrails for him.
00:14:10.940 –> 00:14:15.600
Giles: And if you’re not qualified to be those guardrails, well, then it’s not gonna go good.
00:14:16.320 –> 00:14:23.240
Giles: One of the other people I remember talking had said something about, I’m going to take my old product and make it into a new product.
00:14:23.240 –> 00:14:27.540
Giles: And I thought, you’re really discounting your role in that, you know?
00:14:27.880 –> 00:14:28.280
Roddy: Yeah.
00:14:28.640 –> 00:14:30.740
Giles: The AI is not going to do it all for you.
00:14:30.800 –> 00:14:35.300
Giles: So if you say, look at my old code and make it into new code, yeah, he can probably do that.
00:14:35.300 –> 00:14:47.300
Giles: He can make shiny new code on a shiny new platform, but he’s not going to know that, you know, like one of the things we recently did was, it’s something called SQL clustering.
00:14:47.460 –> 00:15:00.340
Giles: So like the bad old days, you know how you had your file server, and if the file server crashed, well, then you’d reboot everything, and then the backup file server would take over, and then you got through your night, and then the repairman came and fixed your server the next day.
00:15:01.160 –> 00:15:06.920
Giles: SQL clustering, you can say, these two computers could be my server, or these five computers could be my server.
00:15:07.060 –> 00:15:09.740
Giles: And when you start up, they hold an election.
00:15:09.740 –> 00:15:11.940
Giles: They say, who’s the most qualified here?
00:15:11.960 –> 00:15:15.100
Giles: You know, whatever, CPU, memory, you know.
00:15:15.660 –> 00:15:21.200
Giles: Anyhow, they decide who the leader is, and if that leader, and he’s the source of truth, he gets everything first.
00:15:21.240 –> 00:15:25.640
Giles: If he dies, they hold another election in one second, pick a new leader and keep going.
00:15:25.980 –> 00:15:29.800
Giles: Yeah, that’s light years ahead of what we had 20, 30 years ago.
00:15:30.000 –> 00:15:39.080
Giles: And if you don’t know that exists, you’re just going to say, yep, do it how I did it 20 years ago, and you’re going to get a product built in shiny new technology with a 20 year old architecture.
00:15:39.080 –> 00:15:43.920
Giles: So that’s, I think that’s the piece that people are missing is the architect end of it.
00:15:44.100 –> 00:15:49.160
Giles: If you’re not the master of that technology, then who’s going to fix it when it breaks?
00:15:49.160 –> 00:15:52.480
Giles: Who’s going to tell them what he did wrong when he codes something wrong?
00:15:53.440 –> 00:15:56.220
Giles: You’re still going to need that guy for the foreseeable future.
00:15:56.700 –> 00:16:02.220
Roddy: Yeah, just like you can have the fastest car on the world and not just a fast car, you can have a rocket powered car, right?
00:16:02.220 –> 00:16:08.800
Roddy: But if it’s not going in the right direction, what’s the point of having the fastest place of going to the wrong destination?
00:16:08.800 –> 00:16:12.240
Roddy: So let me ask you this, like really specifically.
00:16:12.240 –> 00:16:19.400
Roddy: So you started Future POS from scratch and in the RSPA membership, we have several startup niche software companies.
00:16:19.880 –> 00:16:27.280
Roddy: So what would be your advice to those leaders related to whether it’s AI or anything that you would give advice to them?
00:16:27.280 –> 00:16:33.540
Roddy: Like going back, I guess, is a question like what would you tell your 19-year-old self, John, even though the situations have changed?
00:16:33.540 –> 00:16:35.820
Roddy: What would you tell somebody in the startup ISV?
00:16:35.940 –> 00:16:39.440
Roddy: What’s a very important thing that they need to keep top of mind?
00:16:40.200 –> 00:16:42.500
Giles: I mean, I think you’d have to be realistic about it.
00:16:42.500 –> 00:16:43.920
Giles: It’s not a magic bullet.
00:16:46.340 –> 00:16:56.760
Giles: I remember somebody else saying, I’ve got this great customer loyalty piece, and now with AI, I’m going to be able to write an integration to every point of sale system out there.
00:16:56.760 –> 00:16:59.380
Giles: I thought, that’s not really your problem.
00:17:00.160 –> 00:17:01.980
Giles: Do those people want to do business with you?
00:17:02.560 –> 00:17:09.420
Giles: More importantly, if you can do 50 integrations, how long is it going to take them to write their own customer loyalty and not need you?
00:17:10.060 –> 00:17:18.620
Giles: One of the things that occurred to me is you may see, for lack of a better phrase, we call it Toast Syndrome.
00:17:18.980 –> 00:17:29.500
Giles: Toast had started out as a handheld, and they wanted everybody to adopt their handheld and integrate it to their point of sale, and they couldn’t get traction, so they got a bunch of private equity money and went and built the rest.
00:17:29.580 –> 00:17:46.760
Giles: And this is one of those situations where you could go try and build the rest, and you might do great at it or you might not, because again, you might think AI is just going to do these magical things and make it all happen for you, and make these decisions, and it will not.
00:17:48.060 –> 00:17:58.840
Giles: But yeah, I mean, I think if you’re a one-trick pony, you better learn some new tricks because that’s not going to get you through for the next 10 years.
00:17:59.760 –> 00:18:01.140
Giles: You’re going to have to be a multi-facet.
00:18:01.140 –> 00:18:10.760
Giles: I mean, you’re going to have to really take advantage of everything AI can do to make your product so robust that somebody that is thinking of partnering with you doesn’t just decide to do it themselves.
00:18:11.500 –> 00:18:15.980
Roddy: Yes, and that’s, I guess, one of those constants like looking back on the last 20 years in the industry.
00:18:16.080 –> 00:18:21.820
Roddy: If you’re operating in that lowest level, right before is folks who were just selling cash registers.
00:18:22.040 –> 00:18:36.440
Roddy: Then it was like, well, wait a second, these other very simple point of sale systems are out, distancing them, you’ve got to continue to upskill in terms of what you do as a leader, as an organization, as a software, as a reseller.
00:18:36.440 –> 00:18:38.440
Roddy: Again, we’ll talk about how AI impacts VARS.
00:18:38.440 –> 00:18:49.140
Roddy: But I guess, can you expand upon that in terms of you’ve always got to be moving forward no matter what it is that technology is going to catch up with you, and you’re going to get displaced by somebody who can do that with a snap of a finger?
00:18:50.040 –> 00:18:53.400
Giles: I’ve always said, software is an arms race.
00:18:53.400 –> 00:18:55.000
Giles: It’s a constant arms race.
00:18:55.340 –> 00:18:58.920
Giles: You’re reinventing, you’re improving, you’re trying to get better.
00:19:00.580 –> 00:19:08.640
Giles: I think that in the future, it’s going to become very important who you partner with.
00:19:08.820 –> 00:19:18.380
Giles: And a lot of these VARs, I mean, they’re partnering with this guy they like or that guy that is payment diagnostic or pick your flavor of why they partner with them.
00:19:18.460 –> 00:19:22.340
Giles: You’re going to need to partner with the people that are really getting this technology right.
00:19:22.620 –> 00:19:38.820
Giles: And in producing solid working solutions versus just a shiny thing or the credit card thing has become, I don’t want to say a boondoggle, but I think you’re aware we opened an office for down in Myrtle Beach with Zoe.
00:19:39.520 –> 00:19:47.080
Giles: There is a lot of legacy software down there and they’re selling it.
00:19:47.160 –> 00:19:54.580
Giles: The VAR is selling it solely because he can make credit card residuals off it, not because it’s the best solution, not because it’s a modern solution.
00:19:54.700 –> 00:19:58.540
Giles: And I don’t think that those guys are going to be able to do that in the future.
00:19:59.680 –> 00:20:04.980
Giles: Their payments agnostic, poorly funded POS is going to get beat by somebody that’s not.
00:20:07.000 –> 00:20:08.380
Giles: You’ve got to have money to do all these things.
00:20:08.380 –> 00:20:13.100
Giles: AI doesn’t change the need for money to build a software company.
00:20:13.140 –> 00:20:15.560
Giles: So I don’t know.
00:20:18.560 –> 00:20:23.180
Roddy: I just picture somebody entering their AI and be like, give me better cash flow, right?
00:20:23.180 –> 00:20:24.140
Roddy: No, it doesn’t work that way.
00:20:24.180 –> 00:20:27.800
Roddy: You’ve got to figure out what the right formula is for that.
00:20:27.800 –> 00:20:30.840
Roddy: And again, there’s a lot of different ways to skin that cat.
00:20:30.840 –> 00:20:35.840
Roddy: But again, the fundamental that you’re talking about is you’ve got to stay ahead of the competition.
00:20:35.840 –> 00:20:38.720
Roddy: You’ve got to do what your customers want you to do.
00:20:38.880 –> 00:20:43.340
Roddy: And if someone else can do it, I think it was Carl Boutte who said it on the RetailNOW stage.
00:20:44.400 –> 00:20:54.980
Roddy: If you’re only providing something that someone else can buy online and totally replace you in 10 minutes, like you’re in a commoditization game, like the end is near, you’ve got to improve what you do.
00:20:54.980 –> 00:21:02.220
Roddy: So, all right, so we’re gonna pause here to let our listeners and viewers know about the Retail Solutions Providers Association.
00:21:02.420 –> 00:21:11.440
Roddy: RSPA is North America’s largest community of retail technology bars, software providers, vendors and distributors in the retail, restaurant and grocery verticals.
00:21:11.640 –> 00:21:16.520
Roddy: To accelerate your success through an RSPA membership, email membership at gorspa.org.
00:21:17.800 –> 00:21:24.300
Roddy: Also, you want to say thanks to these channel-focused companies who support the RSPA community and make this podcast and video series possible.
00:21:24.420 –> 00:21:30.800
Roddy: Our gold sponsors are Bluestar, CoCard, Epson, Global Payments, and ScanSource.
00:21:30.800 –> 00:21:37.640
Roddy: And then finally, registrations now open for Inspire 2027, the Retail IT Channel’s premier leadership conference.
00:21:37.720 –> 00:21:42.260
Roddy: RSPA Inspire is set for January 24th through 27th, in Puerto Rico.
00:21:42.400 –> 00:21:50.300
Roddy: For more information, visit gorsp.org/inspire so you can experience networking nirvana.
00:21:50.300 –> 00:21:52.480
Roddy: So John, let’s talk about VARs now.
00:21:52.480 –> 00:21:57.800
Roddy: And you’ve always been a pro reseller ISV, working with hundreds of VARs over the years.
00:21:58.020 –> 00:22:00.980
Roddy: How do you see AI impacting VARs?
00:22:01.040 –> 00:22:05.380
Roddy: And again, as we talked about one of these prior podcasts, you have your own VAR, right?
00:22:05.380 –> 00:22:06.800
Roddy: In Butler, Butler Business Systems.
00:22:06.800 –> 00:22:11.520
Roddy: Then there’s also mentioned your daughter’s organization in Charleston.
00:22:11.660 –> 00:22:15.700
Roddy: So talk about how do you see AI in Southern Charm POS?
00:22:15.700 –> 00:22:16.500
Roddy: Is that what it is?
00:22:17.040 –> 00:22:17.540
Roddy: Yes.
00:22:17.860 –> 00:22:21.140
Roddy: How do you see AI impacting VARs in the near term?
00:22:22.240 –> 00:22:35.160
Giles: You know, I think that the big piece is making sure that they partner with an ISV that is very, you know, is leveraging AI and is very early, very much an early adopter of AI.
00:22:35.380 –> 00:22:38.440
Giles: Because if not, there’ll be dinosaurs before they know it.
00:22:39.440 –> 00:22:42.560
Giles: But I think it can be additive for both VARs and their customers.
00:22:43.440 –> 00:22:48.840
Giles: Having said that, the VAR niche is the fact that they are the physical hands that come fix things when you have a problem.
00:22:48.860 –> 00:22:50.960
Giles: And that’s why I’ve always believed in the VAR model.
00:22:50.960 –> 00:22:57.640
Giles: You know, it’s why people don’t buy from the 800 POS companies because, you know, they don’t come fix stuff.
00:22:57.640 –> 00:22:59.500
Giles: You can talk to our AI chat bot.
00:22:59.540 –> 00:23:00.800
Giles: Good luck, you know.
00:23:00.940 –> 00:23:02.360
Giles: We’ll mail you something on Monday.
00:23:02.640 –> 00:23:17.320
Giles: So, I mean, I feel like the AI can be additive to the VAR, you know, in areas, but, you know, don’t lose sight of the fact that people buy from you because you stand behind the product.
00:23:17.320 –> 00:23:22.520
Giles: You know, it was funny, I had a, you know, as I said, I’m very, very proud of the products I’ve produced over the years.
00:23:22.660 –> 00:23:28.060
Giles: And I had a very successful VAR once that I was like, oh, you know, feature X and feature Y.
00:23:28.340 –> 00:23:32.340
Giles: And he’s like, people buy from me because they know I’m gonna come fix the crap when it breaks.
00:23:32.340 –> 00:23:33.600
Giles: They don’t care what they’re buying.
00:23:33.900 –> 00:23:39.480
Giles: And I’m like, it really hurts my feelings, but it’s probably pretty accurate, you know?
00:23:40.220 –> 00:23:44.760
Giles: So I mean, I’ve never lost sight of like, what does make that VAR model special?
00:23:44.760 –> 00:23:45.300
Giles: You know what I mean?
00:23:45.300 –> 00:23:51.320
Giles: And that’s, it’s always gonna come back to, they pick up the phone on a Friday night, they’ll get in their car and come drive there.
00:23:51.460 –> 00:23:57.760
Giles: And yeah, AI great, but don’t lose sight of who you are because that’s what makes you special.
00:23:58.380 –> 00:23:59.980
Roddy: Yeah, yeah, those things can’t replace.
00:23:59.980 –> 00:24:04.560
Roddy: And you and I used to be members, or I’m sorry, we used to be neighbors in Western Pennsylvania.
00:24:04.560 –> 00:24:08.520
Roddy: I was north of you in Erie, you’re in Butler, north of Pittsburgh.
00:24:08.520 –> 00:24:20.860
Roddy: I’m down here in Raleigh now, and there’s a plumber who runs an ad, and it’s basically like, AI can’t fix this pipe, AI can’t fix your HVAC system, like call me, and I’ll go and take care of this for you.
00:24:20.860 –> 00:24:26.220
Roddy: So can you talk about, so let’s talk about there’s that local presence, there is that relationship.
00:24:26.400 –> 00:24:29.100
Roddy: What do you think VARs need to do beyond that?
00:24:29.100 –> 00:24:36.900
Roddy: What would be the new tech stack that you think, as you’re a VAR, you think you should be looking forward to?
00:24:36.900 –> 00:24:42.700
Roddy: It’s that leaning on the right suppliers to make sure they’re pro AI, pro reseller.
00:24:42.700 –> 00:24:47.180
Roddy: But you talk about, what are some other strategic things you do technology-wise as a VAR in today’s day and age?
00:24:47.780 –> 00:24:59.320
Giles: Well, I mean, I can’t speak for what I do as a VAR because everything I do in my VAR, I do through the ISV lens of how can I help the VAR be more efficient.
00:24:59.320 –> 00:25:06.340
Giles: So, I kind of tend to blend the two together because I ride both sides of the fence.
00:25:07.080 –> 00:25:10.840
Giles: And I take pride in that because I feel like, look, I eat my own cooking.
00:25:11.620 –> 00:25:12.980
Giles: I’m not saying, hey, Mr.
00:25:12.980 –> 00:25:16.240
Giles: VAR X, go sell this brand new version and let me know how she goes.
00:25:16.800 –> 00:25:18.420
Giles: We install everything here first.
00:25:18.420 –> 00:25:19.900
Giles: We test everything here first.
00:25:20.500 –> 00:25:28.140
Giles: I know you’re probably aware we created a CRM that is intended specifically for VARs to help them grow their businesses.
00:25:29.200 –> 00:25:58.540
Giles: One of the things we did recently, we added an AI generated lead discovery tool because Zoe being in Myrtle Beach not having anything in the CRM, and any leads to note a call on, it was nice and easy to say, create something with AI that give me all the restaurants in a 10-mile radius, and give me all their addresses, and any contact info you can find, and what type of concept they are, things like that.
00:25:58.540 –> 00:26:04.720
Giles: And it did it really slick, and you just import them, and then you can do a postcard mailer from that if you want.
00:26:05.300 –> 00:26:17.700
Giles: And that was actually in reaction to a VAR trend that I’ve seen for years, which is working with my payments buddy down on the street because he gives me leads.
00:26:19.720 –> 00:26:27.860
Giles: We had one of those early on in the VARs we were signing up, and he was working with his payments buddy, but they didn’t like the software at this place.
00:26:27.860 –> 00:26:42.580
Giles: And so he brought me the statement and we peeled back the onion, come to find that the payments buddy that got him into this place, did all the payments deal, he was making 100 bucks a month when we dug in and found out what the profit was.
00:26:42.580 –> 00:26:44.480
Giles: It was 1700 bucks a month.
00:26:46.040 –> 00:26:54.240
Giles: So it was kind of an eye-opener that you’re giving the payments buddy 1600 bucks a month for giving you that lead and taking $100.
00:26:55.360 –> 00:26:58.440
Giles: Maybe I should find a way to help the VARs find leads on their own.
00:26:58.580 –> 00:26:59.040
Roddy: Right.
00:26:59.620 –> 00:27:11.900
Giles: So that was kind of the catalyst for the lead discovery is, maybe we can help him better market his own business so his payments buddy doesn’t eat his lunch.
00:27:13.360 –> 00:27:13.780
Roddy: Yes.
00:27:14.580 –> 00:27:15.180
Roddy: That’s interesting.
00:27:15.220 –> 00:27:24.320
Roddy: That’s again where you’re not outsourcing the strategy with AI, but you’re outsourcing the execution because, man, what a pain it was to build lists back in the day.
00:27:24.320 –> 00:27:30.080
Roddy: But now, like you said, if you just set up the right parameters, you can fill it in for it and give you way more color than you ever could have had before.
00:27:30.360 –> 00:27:30.780
Giles: Yeah.
00:27:31.260 –> 00:27:32.480
Giles: Like I said, it’s very powerful.
00:27:32.480 –> 00:27:34.780
Giles: It goes out, scrapes the web and boom, here you go.
00:27:35.020 –> 00:27:35.740
Giles: Here’s everything.
00:27:36.620 –> 00:27:42.300
Giles: It took a little time to develop it, but man, it is so slick now and they use it regularly.
00:27:42.820 –> 00:27:43.480
Roddy: Very cool.
00:27:43.480 –> 00:27:44.420
Roddy: Very interesting.
00:27:44.720 –> 00:27:47.040
Roddy: Couple more questions for you, John, with the time that we have.
00:27:47.400 –> 00:27:49.560
Roddy: It ties in with what we’ve been talking about with AI.
00:27:49.600 –> 00:27:56.160
Roddy: A big theme at the RetailNOW show, which you attended and exhibited, was AI powered data analytics.
00:27:56.160 –> 00:27:57.520
Roddy: There was a breakout about it.
00:27:57.520 –> 00:28:06.700
Roddy: We actually have resellers for the RSPA working with Pizza Hut was one, and another one worked at FIFA, the World Cup, so working on that stage.
00:28:06.700 –> 00:28:17.060
Roddy: But on the main stage, Retail Expert Carl Boutte said, VARs must be repositioned from installers of products to stewards of the merchant’s intelligence.
00:28:17.220 –> 00:28:27.080
Roddy: I’m curious, what’s your take on how you think ISVs and VARs should adjust their offering in terms of now offering also data analytics merchant business intelligence?
00:28:27.080 –> 00:28:28.100
Roddy: What’s your take on that?
00:28:28.600 –> 00:28:42.220
Giles: I think that’s a small error, but I’ll just start by saying that I don’t entirely agree with that approach because I feel like he kind of bumps the VAR and the ISV into the same boat, but that’s not really how it works in business.
00:28:42.220 –> 00:28:48.080
Giles: And the VARs and their customers, they’re still at the mercy of what the ISV develops and delivers.
00:28:48.800 –> 00:28:58.940
Giles: Now I do have, because Round 2 is a very modern product, very accessible database, I have resellers that write their own reports.
00:28:59.860 –> 00:29:07.540
Giles: I give them the schema and a tech doc that tells them what everything is in there, and they go to town and create reports.
00:29:07.900 –> 00:29:13.060
Giles: So I do think that that’s a nice value that a VAR can add in that technology realm.
00:29:13.060 –> 00:29:21.340
Giles: But without a solid foundation, without a solid future, you’re polishing a turd.
00:29:21.640 –> 00:29:28.160
Giles: There are some products that today they have significant market share, but I don’t see the reinvestment.
00:29:28.260 –> 00:29:36.960
Giles: And I think that, I think it’s, I always say that the VAR ISV model is kind of like a game of musical chairs.
00:29:37.980 –> 00:29:44.520
Giles: You look at the typical VAR’s website, you can see four products that aren’t even around anymore, and then the one they currently sell.
00:29:44.680 –> 00:29:47.660
Giles: And it’s like, when it’s great, it’s great.
00:29:47.660 –> 00:29:50.640
Giles: And then when it’s no longer great, they got to find something else.
00:29:50.640 –> 00:29:57.480
Giles: And I think we’re at that, you know, where like 2017 was shift four buying everything up.
00:29:57.480 –> 00:30:05.260
Giles: I think we’re to the point where a lot of these companies that haven’t invested, it’s kind of like the owner’s piggy bank and they’re riding it out to retirement.
00:30:05.260 –> 00:30:15.100
Giles: And I think a lot of those resellers need to say, you know, maybe I need to consider other options just because I don’t see this being a viable product in five, 10 years.
00:30:15.900 –> 00:30:26.880
Giles: So, I mean, I think that our futures are intertwined, but not completely, you know, like the VAR can’t have success without a solid ISV and vice versa.
00:30:27.520 –> 00:30:32.020
Giles: But, you know, that doesn’t mean that they’re totally yoked for life.
00:30:32.040 –> 00:30:35.300
Giles: The VAR can always say, you know what, I’m not getting what I need from you and I’m going to look elsewhere.
00:30:35.880 –> 00:30:36.100
Roddy: Yeah.
00:30:36.100 –> 00:30:38.380
Roddy: And there are tons of options out there now, right?
00:30:38.380 –> 00:30:42.580
Roddy: Like that’s, I mean, you could see that for you go to the retail now.
00:30:42.580 –> 00:30:46.780
Roddy: I used to joke the number of ISVs who were attending the events.
00:30:46.780 –> 00:30:51.040
Roddy: It was a lot of times, you know, you and Kelly and Jeff Reilly, right?
00:30:51.040 –> 00:30:54.560
Roddy: Back when he was a diner, where like you do, there weren’t a whole bunch of ISVs out there.
00:30:54.700 –> 00:30:59.020
Roddy: Now, you know what, 40% of the show floor at retail now are ISVs.
00:30:59.020 –> 00:31:02.980
Roddy: We added 70-something members in the three months before RetailNOW.
00:31:03.320 –> 00:31:07.680
Roddy: We added slightly more software developers than we did VARs.
00:31:07.680 –> 00:31:10.580
Roddy: And it’s always been that there are more VARs than ISVs.
00:31:10.580 –> 00:31:11.500
Roddy: But I think that’s your point.
00:31:11.500 –> 00:31:13.600
Roddy: There’s way more options out there for these VARs.
00:31:13.640 –> 00:31:15.660
Roddy: But it seems like they need to put in the legwork, right?
00:31:15.660 –> 00:31:17.540
Roddy: In order to find out who’s the right man.
00:31:17.540 –> 00:31:20.220
Giles: That reminded me, do you think Jeff Rowley can still do those splits?
00:31:23.880 –> 00:31:25.760
Giles: I was very impressed with that.
00:31:27.720 –> 00:31:30.100
Roddy: Yeah, and for those who don’t know Jeff Rowley, he’s about 6’8.
00:31:31.640 –> 00:31:34.080
Giles: He dropped out into a split, or at least he could.
00:31:35.540 –> 00:31:37.120
Roddy: Back in the day, for sure.
00:31:38.020 –> 00:31:39.260
Roddy: John, last question for you.
00:31:39.260 –> 00:31:42.460
Roddy: I’m curious, how are you personally leveraging AI?
00:31:42.460 –> 00:31:50.500
Roddy: We talked about it from a global standpoint, but what applications have helped make you a more effective leader, more effective and more efficient leader for your business?
00:31:50.920 –> 00:31:51.180
Giles: Yeah.
00:31:51.180 –> 00:31:59.440
Giles: Well, I just want to say, for the benefit of all the other ISVs at Round 2, we’re doing nothing unique or innovative with AI, and I advise every ISV to do the same.
00:32:00.120 –> 00:32:00.900
Giles: Just kidding.
00:32:00.900 –> 00:32:04.320
Giles: Now, honestly, we’re leveraging it everywhere in our business.
00:32:04.600 –> 00:32:10.840
Giles: But like I touched on before, most importantly, it’s about leveraging it in your customer’s business.
00:32:10.920 –> 00:32:30.600
Giles: Now, I’m unique from this perspective, because I view the ISV VAR and his customers as one big ecosystem, and that’s partly because we’re in ISO, and everybody knows that the bulk of the money comes from the credit card side of the business, like it or hate it.
00:32:31.540 –> 00:32:41.040
Giles: So I have the perspective that if somebody is stealing from my merchant, well, they’re stealing from my VAR too, and they’re also stealing from me, and I hate being stolen from.
00:32:41.040 –> 00:32:51.800
Giles: So we’re doing a lot of really cool stuff right now around loss prevention, because if I can keep the merchant from getting robbed, everybody in our ecosystem benefits.
00:32:53.860 –> 00:33:07.120
Giles: I always pick on the payments agnostic guys, but another reason that their interests are not aligned with their customers like mine are, how much does a payments agnostic guy care if the merchant’s getting ripped off?
00:33:07.120 –> 00:33:09.240
Giles: He got paid, he’s moving on and doing the next deal.
00:33:10.080 –> 00:33:19.720
Giles: So I mean, it kind of creates like, okay, I’m worried about you right up until the time you sign that deal, and then I’m off to the next deal, don’t really care how things shake out for you.
00:33:19.900 –> 00:33:26.880
Giles: And I mean, I hate to say it, there was a time in the future before credit cards where we would lose a customer.
00:33:26.880 –> 00:33:30.320
Giles: It’s like, eh, I was never gonna make another nickel off and what do I care?
00:33:30.400 –> 00:33:39.180
Giles: You know, but it was kind of enlightening even then to say, I should care, you know what I mean?
00:33:39.180 –> 00:33:43.940
Giles: There should be a reason that I care if my customer goes out of business or leaves.
00:33:44.740 –> 00:33:51.960
Giles: And I do feel like for all the negatives you see with the payments piece, it does pull everybody’s interests together, you know?
00:33:51.960 –> 00:33:57.600
Giles: Like I don’t want stolen from, my bar doesn’t want stolen from and neither does his customer.
00:33:57.600 –> 00:34:00.760
Giles: So I’m gonna do everything I can to help make sure that doesn’t happen.
00:34:01.640 –> 00:34:16.400
Roddy: Right before, like when there was the break fix model for resellers, they were rooting for something to break inside their customers so they can actually go make money, but now in the recurring revenue, they want to keep them up and running so everybody’s on the same side of the table instead of working against one another.
00:34:16.400 –> 00:34:20.740
Giles: Yeah, and to your point, if the system’s down and can’t take payments, nobody’s making money.
00:34:20.820 –> 00:34:40.320
Giles: So yeah, I feel like for all of the negatives that come with the payments industry and all the payments bros stuff, this in my mind, in my business model really aligns things to where I’ve got everybody’s back that I’m working with because we’re a team and I don’t want anybody to get shortchanged.
00:34:40.940 –> 00:34:46.960
Giles: We’ve got some big announcements coming up, but I think I told you I’m going to RTSS, so I can’t, again, steal my own thunder.
00:34:46.960 –> 00:34:50.720
Giles: But yeah, I’m really excited about what we got going.
00:34:51.080 –> 00:35:04.560
Roddy: Yeah, and let me just one more follow up question, John, and I’m just curious about this because as we’ve talked a lot of RSPA members over the past year or 18 months about AI, some have actually said, hey, I’m like not really comfortable with technology.
00:35:04.680 –> 00:35:10.400
Roddy: So I’m going to try to do as much as I can internally before I introduce anything to my customer.
00:35:10.520 –> 00:35:15.120
Roddy: But it sounds like what you’re saying is, hey, you’ve got to make sure it’s benefiting the customer.
00:35:15.560 –> 00:35:17.820
Roddy: That’s number one and most important, I guess.
00:35:18.940 –> 00:35:20.000
Roddy: How would you expand upon that?
00:35:20.000 –> 00:35:29.380
Roddy: Or what would you say to that VAR or ISV who’s a little bit reticent to go have something with their customer now and say, I got to be more comfortable with it?
00:35:30.560 –> 00:35:34.780
Giles: I guess the biggest call to action I can give you is Toast is already doing it.
00:35:35.040 –> 00:35:42.780
Giles: Toast has a little prompt in their back of house that says, ask me how you’re doing compared to other restaurants in the area.
00:35:42.780 –> 00:35:45.360
Giles: Ask me how you’re doing year over year.
00:35:46.240 –> 00:35:51.180
Giles: It just provides you with sample questions that like, okay, well, how am I doing?
00:35:51.180 –> 00:35:51.820
Giles: And stuff like that.
00:35:52.680 –> 00:35:54.020
Giles: They’re already doing it.
00:35:54.020 –> 00:35:59.400
Giles: And it’s, I would say on a limited scale, but more than pretty much every other ISV out there.
00:35:59.400 –> 00:36:07.820
Giles: So again, if you don’t want to be a dinosaur, you’re going to have to put those AI capabilities in your customer’s hands, or they’re going to go to somebody that does.
00:36:08.100 –> 00:36:08.520
Roddy: Yeah.
00:36:08.520 –> 00:36:08.700
Roddy: Yeah.
00:36:08.700 –> 00:36:09.920
Roddy: And like you said, it’s an arms race.
00:36:09.920 –> 00:36:18.140
Roddy: And again, quoting Carl Butte again on stage, he said, before these things could be measured in years, the amount of change, this is going to be in quarters.
00:36:18.140 –> 00:36:25.680
Roddy: So I think to your point, John, you’re saying, yeah, you might not move at this pace before, you might be patient, but the market’s not going to be patient.
00:36:26.160 –> 00:36:30.000
Giles: Well, I tell my developers a lot of times is to kind of drive it home.
00:36:30.140 –> 00:36:35.520
Giles: Let’s say this is a force multiplier and it can double your productivity.
00:36:35.520 –> 00:36:40.320
Giles: So now a guy that is a five is a 10, or a guy that’s a 10 is now a 20.
00:36:40.320 –> 00:36:40.820
Giles: Well, guess what?
00:36:40.820 –> 00:36:47.000
Giles: If you’re a three or even a five and you don’t do anything to embrace this, you’re now in a field of 20s.
00:36:47.160 –> 00:36:48.620
Giles: So you know what I mean?
00:36:48.620 –> 00:36:51.620
Giles: Your stock just went down by virtue of the fact that you didn’t adopt it.
00:36:51.620 –> 00:36:56.400
Giles: So I think it’s just not an option if you don’t want to become a dinosaur.
00:36:57.900 –> 00:36:58.360
Roddy: Well said.
00:36:58.360 –> 00:37:00.720
Roddy: Well, that does it for this episode of The Trusted Advisor.
00:37:00.720 –> 00:37:07.880
Roddy: If you enjoyed our discussion, be sure to subscribe to the RSPA YouTube channel and The Trusted Advisor podcast so you never miss an episode.
00:37:07.880 –> 00:37:11.940
Roddy: Before we go, big thanks again to John Giles for sharing his wisdom with us today.
00:37:12.080 –> 00:37:20.180
Roddy: Thanks also to RSPA Marketing Director, Chris Arnold for his production work, Joseph McDade for our music, and last but not least, thanks so much to you for listening.
00:37:20.240 –> 00:37:27.080
Roddy: Our goal at the RSPA is to accelerate the success of our members in the retail technology ecosystem by providing knowledge and connections.
00:37:27.120 –> 00:37:30.700
Roddy: For more information, visit our website at gorspa.org.
00:37:30.760 –> 00:37:34.220
Roddy: Thanks for listening and goodbye everybody.
